FCC plan would let companies pay for priority Internet service

By Todd Shields and Chris Strohm, Bloomberg News

April 24, 2014

Internet service providers will be able to negotiate agreements with companies such as Netflix Inc. and Amazon.com Inc. for priority Web service under new rules proposed by the top U.S. communications regulator.

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Federal Communications Commission Chairman Tom Wheeler said the proposal does not abandon the agency's Internet fairness policy to treat all Web content equally. Open-Internet advocates say the plan would move away from those policies, known as “net neutrality.”

Wheeler, who is sending the proposal to the five-member agency today, plans to push for a preliminary vote next month and wants to have a rule in place by the end of the year.

The FCC has been seeking to replace a rule voided in January by a U.S. court. The regulation required companies that provide businesses and consumers high-speed Internet service over wires, or broadband, to treat Web traffic equally and didn't let them charge for faster or more reliable access.

The FCC will test any proposed deals for harm to competition and consumers, FCC officials, who asked for anonymity to discuss the proposal, told reporters on a conference call today.

Wheeler said in a blog post today that the proposal will bar Internet service providers such as AT&T Inc. and Verizon Communications Inc. from blocking legal content. It also requires the companies to disclose their policies to subscribers and users and prevents them from acting “in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

Companies pushing for open-Internet protections have included the largest search-engine provider, Google Inc.; the largest Internet retailer, Amazon; and the biggest online-subscription video provider, Netflix Inc. They are part of the Internet Association, which in an April 3 filing told the FCC the agency should adopt enforceable rules so their services won't be unfairly blocked, “explicitly or implicitly.”

Policy groups that have supported rules to prevent Internet service providers from unfairly blocking or slowing Web traffic began voicing objections to the Wheeler's plan as elements of it became public Wednesday.

Michael Weinberg, vice president of the policy group Public Knowledge, said Wheeler's proposal “is not net neutrality.” The FCC is inviting service providers “to pick winners and losers,” Weinberg said in an emailed statement.

“Pay-for-priority schemes will be a disaster for startups, nonprofits and everyday Internet users who cannot afford these unnecessary tolls,” Craig Aaron, president of the group Free Press, said in an emailed statement. He called the proposal “a convoluted path that won't protect Internet users.”

Former FCC Commissioner Michael Copps said in a statement the proposal is “a huge step backwards and must be stopped.”

“If the Commission subverts the Open Internet by creating a fast lane for the 1 percent and slow lanes for the 99 percent, it would be an insult to both citizens and to the promise of the Net,” said Copps, who now serves as a special adviser to Common Cause's Media and Democracy Reform Initiative.